What is a free-agent labor market?
A free-agent labor market is one in which workers feel confident about available opportunities and will pursue them, even if those opportunities lie outside their current company.
“I think historically a free-agent labor market had to do a lot with the gig economy and people wanting to work on their own schedule, their own time, their own pace and so forth,” Krishnaiah observes.
Corporations predictably take a dim view of this setup. For them, retaining and attracting strong employees gets tough when workers would prefer to move from opportunity to opportunity rather than buckle down at one company for the long haul.
Krishnaiah likens this kind of market to when professional athletes “trade up” for higher salaries. “That’s exactly what’s happening,” he says. “Individuals are moving on to the next place. … But I think that both sides are still not fully accepting what that means. And they’re using it in their own interest as opposed to a collective interest.”
There are many potential reasons for this current phenomenon, including inflation, the pandemic and the rise of remote work. But Krishnaiah points to demographics as a major factor many people don’t fully appreciate.
“We’re nearly to the point where more workers are leaving the workforce than entering, and I estimate we’ll be like that for the next 10 to 15 years,” he says. “That results in labor shortages.”
And that results in an employee-driven job market.
What the Career Optimism Index reveals
The 2023 Career Optimism Index, which is the third such study conducted by UOPX’s Career Institute, seeks to acquire a solid assessment of the current employment landscape from both employer and employee perspectives.
“I was really focused a lot on the employer–employee relationship,” Krishnaiah says of his involvement. “How do you take your existing employee base and create a theoretical free-agency type of model without all the negative downside implications?”
To answer that question, Krishnaiah has plenty of, you guessed it, data. For example: